Treasury Wine Estates (TWE) has continued its strong run of results, delivering a performance that CEO Michael Clarke said reflected “the continued growth momentum in our business”.
TWE’s net profit after tax increased 16 per cent to $419.5m, while EBITS increased by 25 per cent to $662.7m, on a reported currency basis
Other strong results included net sales revenue increasing 17 per cent and net sales revenue per case increasing 14 per cent over the prior year.
Clarke said: “On a constant currency basis this is the strongest organic net sales revenue growth in our history, continuing the strong performance we announced at our half-year results update.
“Demonstrating the strength of our premiumisation strategy net sales revenue delivered from luxury and masstige brands grew 27 per cent and now represents 69 per cent of our total NSR, up from 43 per cent when we started this journey five years ago.
This strong profit growth has been achieved while maintaining our practice of taking the financial impact of fixing our business above the line, not below the line in material items.
“From a business and strategy execution perspective we are pleased with the performance of all our regions.”
Speaking about the performance of the Australian market, Managing Director of the region, Angus McPherson described Australia as a “gold standard region”.
“In Australia, strong top-line growth momentum continued with NSR up three per cent,” McPherson said. “Favourable cost of business drove EBITS which increased 17 per cent to $156.5m and EBITS margin increased 3.7 percentage points to 26 per cent, with ANZ now our second region, behind ASIA to achieve a margin ahead of our group EBITS margin target of 25 per cent.
“In many respects ANZ is our gold standard region, where strong collaborative relationships with our retail partners, combined with a growing portfolio of luxury and masstige brands, that we are actively investing behind, is combining to deliver excellent results.
“We are seeing positive growth momentum in a number of our brands, five brands in particular are showing strong growth including Squealing Pig, 19 Crimes, Seppelt, The Stag and T’Gallant – all propositions that are continuing to drive our growth across luxury and masstige categories.”
He added: “TWE is outperforming the market in the $10-$15 segments, and all price segments above $20. 19 Crimes continues to enjoy spectacular growth, up 135 per cent in volume this year as we continue to drive distribution in Australia. Squealing Pig is continuing to deliver double-digit earnings growth and is the number one rose in Australia.
“We maintain a 25 per cent market share target in Australia and our priority is to achieve this in a sustainable and repeatable way and not at the expense of margin, by chasing low margin, commercial wine volume, but rather by focusing on a continued mix-shift towards growing our presence in masstige and luxury.”